Controlled foreign companies
The measure
HMRC have announced that details of the proposed framework of the new controlled foreign companies ('CFC') regime will be published in the New Year.
Who will be affected?
Broadly, the CFC regime is potentially relevant to all UK resident companies that have subsidiaries resident in other countries.
When?
The Government has previously stated that it aims to introduce a new CFC regime in Finance Act 2011. Whether this can be achieved remains to be seen. No details as to what this regime may look like have as yet been made available.
It is disappointing that CFC reform has fallen so far behind the other changes to the UK's taxation of 'foreign profits' introduced in Finance Act 2009, because we believe the UK CFC rules are an important part of the reform package and a major consideration for businesses in evaluating UK competitiveness.
We understand that the intention is for proposals to be published in January. We hope that they will reflect the significant consultation with business that has occurred in 2009 and outline some detailed suggestions of what a new model may look like, so that the Government's previously stated target of implementation in 2011 remains realistic.
